SEOUL, June 22 (Reuters) - South Korean police arrested a younger brother of the country's most wanted man, a businessman linked to a ferry disaster in which hundreds of school children drowned, on Sunday as authorities cast a wide net for the fugitive's family. Yoo Byung-ho was arrested on suspicion of embezzlement, a prosecution official said. Prosecutors and police are seeking Yoo Byung-un, 73, who has eluded one of the country's biggest manhunts for more than a month. They have arrested his wife, younger sister and her husband, a former ambassador to the Czech Republic. His younger sister and her husband, arrested on suspicion of helping Yoo evade arrest, were allowed to go home on Saturday. Yoo Byung-un is wanted on charges of embezzlement, negligence and tax evasion stemming from a web of business holdings centred on I-One-I, an investment vehicle owned by his sons that ran the shipping company, Chonghaejin Marine. Chonghaejin owned the Sewol, which sank off the southwest coast on April 16 killing more than 300 people, many of them school children, on a routine journey from Incheon on the mainland to the southern holiday island of Jeju. The sinking of the Sewol was a disaster that prompted a national outpouring of grief and anger, especially after some crew were caught on video abandoning ship while the children, following instructions, stayed in their cabins. Yoo's elder brother, Yoo Byung-il, has been arrested on charges of embezzlement and violation of real estate laws. His daughter, Yoo Som-na, has been held in France after Interpol called for her arrest "for fraud and embezzlement". Yoo Byung-un, a photographer who held an exhibition at the Louvre in Paris and was once jailed for fraud, has eluded capture in a case which has become an embarrassment for authorities already under pressure for their handling of the disaster. Police and prosecutors twice raided the compound of a religious sect he co-founded, using earth movers to search for tunnels, but to no avail. Authorities have offered a half-million-dollar reward information leading to Yoo's arrest, the maximum allowed for an individual in a criminal case. Lawyers for the 15 surviving crew of the Sewol, who face charges ranging from homicide to negligence, argued on Tuesday that it was up to the coastguard to rescue the passengers, not them. (Reporting by Ju-min Park; Editing by Nick Macfie)